Megaupload recently claimed the US government indirectly "planted" evidence leading to the file-sharing site being shut down. It's not that the US literally planted copyrighted files on Megaupload servers—rather, Kim Dotcom's legal defense says the government compelled Megaupload to keep user-uploaded files in order to cooperate with a separate investigation in June 2010, then charged them in 2012 with not getting rid of those same files.

The US responded Friday in US v. Kim Dotcom (PDF), saying Megaupload isn't telling the truth. "[T]he allegations in the pleading are irrelevant and based on unfounded assertions regarding imagined violations of its rights as a criminal defendant," the US wrote. "Megaupload alleges that the government 'affirmatively [led]' Megaupload to retain certain files on its servers. Yet Megaupload does not cite a single communication between the government and Megaupload or a single instruction from any member of the government to Megaupload; there are none."

That's because the government didn't speak with Megaupload directly in that June 2010 investigation, instead communicating indirectly through Carpathia, Megaupload's hosting provider. According to Megaupload's brief on Jan. 2, the government told Carpathia in the 2010 case that 39 infringing copies of copyrighted movies were on Megaupload servers. Megaupload was not told explicitly to either delete or keep the files, but says it was led to believe it should keep them so as not to tip off the real target of the government's investigation. In shutting down Megaupload one year ago, the US charged the company with keeping 36 of those files despite knowing they were illegally shared.

The US says it didn't tell Megaupload to keep those files and had other evidence against the company as well. "Similarly unfounded is the allegation by Megaupload that the government 'planted Megaupload’s alleged knowledge of infringing files' and misled the Court," the US wrote in its brief Friday. Megaupload argued the US obtained search warrants based only on Megaupload's failure to remove content identified in the June 2010 warrant. That's false, the US said.

"[T]he search warrant executed at Carpathia Hosting in January 2012 does not even mention the June 24, 2010 search warrant," the US wrote. "Instead, that search warrant included other, substantial evidence of criminal intent on the part of Megaupload. For instance, paragraphs 13 and 15 of the search warrant affidavit that supported the search warrant executed at Carpathia on January 19, 2012, explain how Megaupload affirmatively concealed the presence of infringing content on its website. Conspiracy also ignored takedown notices regarding certain infringing content, personally uploaded infringing content to the website, and selectively eliminated links without eliminating infringing content. As each of the individual defendants were employees of the corporate defendant, their individual acts are all attributable to Megaupload."

This particular aspect of the Dotcom case surfaced after the affidavits used to obtain warrants against Megaupload were unsealed due to a related case involving innocent bystander Kyle Goodwin's attempt to retrieve the legitimate files he stored on Megaupload. Megaupload has asked the court for an opportunity to "address the validity" of the warrants the US used to raid Megaupload. The US is obviously opposing that motion.

Why does the govt even bother to justify its actions. They might as well have said 'we are the US govt with the world's mightiest military at our disposal, and we'll do whatever the hell we want. If you don't like it STFU'. Because that's effectively what they do.

39 files are a drop in the bucket compared to what Megaupload is being accused of. Kim Dotcom has created a huge diversion about a seemingly tiny part of the case.

The search warrant is by no stretch of the imagination a "tiny part of the case".

If the search warrant is a big pack of lies, or even a partial pack of lies, then the entire case is in doubt.

I see I wasn't entirely clear. The 2012 Carpathia search warrant (Is it on the Web anywhere? I couldn't find it) may be an important part of the case. (Although I think the internal emails are more interesting.) But if you look at the indictment, the US is accusing Megaupload of a whole bunch of different things including money laundering and wire fraud — the indictment is 90 pages long! Out of their hundreds of alleged crimes, 39 files makes no difference.

Even if the 39-file "entrapment" is thrown out, the rest of the Carpathia warrant may stand.

Even if all the Carpathia evidence is thrown out, Megaupload may still lose due to the other evidence.

TLDR: Kim Dotcom is trying to get 1% of the government's case thrown out. Why? Either he thinks these 39 files are crucial to the case or he's just grasping at straws.

Because we can read the warrant that the government says doesn't say anything about the 39 movies. But it clearly does.

If you could read, you would see the government is referring to the carpathia warrant, not the domain name one.

So again, what the hell does this have to do with the raid on carpathia? What "lies" are contained in any warrant relating to this case?

Well I can read, and it clearly says that those 39 files were used as part of the probable cause for the warrant. Section 17 of the document in case your wondering. Its not the only thing they were looking for, but it was one of the things. So while the government can claim those movies dont count, they sure as heck are listed in the warrant.

Note to Ars: Don't believe a word DotCom says, he's making you guys look like fools.

In this case, you're confusing the roles of the two actors.

Every comedic duo is composed of a comedian or prankster, and a straight-man. Kim Dotcom is the straight-man in this show -- it's the US government that's going to considerable effort to make an ass of itself.

Well I can read, and it clearly says that those 39 files were used as part of the probable cause for the warrant. Section 17 of the document in case your wondering. Its not the only thing they were looking for, but it was one of the things. So while the government can claim those movies dont count, they sure as heck are listed in the warrant.

Which is, as I already pointed out, a different warrant, and not the one the government is quoted as referring to.

So, like I said, how does this undercut the government's case? Do the entire proceedings rest on this one paragraph of this one warrant to seize the domain names?

36 infringing files? this all the reason the government needed to go all gung ho on megaupload?why didn't the government just talk it over with mega and slap a hefty fine instead?they weren't dealing in drugs or prostitution anyway.

They were engaging in the distribution of illegal goods. Indeed, their crimes are far worse than prostitution and drug use from a moral standpoint; those are victimless crimes, whereas copyright infringement is not.

And it was explicitly stated that there was more evidence than this.

Please read the article before commenting.

-aivars- wrote:

Good to know that I am no lawyer. Because my logic fails here: "search warrant included other, substantial evidence of criminal intent". I set aside adjective, but still - warrant contained evidence? If they already had evidence, why this search warrant was needed afterall? How can search warrant include evidence?

Man, are people really this ignorant?

The government HAS to have probable cause to get a search warrant - they need to have sufficient evidence of wrongdoing in order to get one. Search warrants are executed in order to gather additional evidence.

If they don't where you live, you live in a police state.

masterblinky wrote:

So the owners of the rental lock boxes are guilty of drug trade if someone stores illegal drugs in them? The banks are also guilty of holding illegal items if someone puts one in a safety deposit box?

Yes, if they know the material is there and don't do anything about it, they are in fact guilty of a crime.

In the case of MU it is actually much worse though, as it isn't analogous at all - in their case, they are actually guilty of THE crime of willful distribution.

masterbinky wrote:

If the search warrant ends up not being correct in a significant way, then all evidence aquired by that search warrant is inadmissable. If everything they have begins with that warrant, that drop in the bucket, determines whether the WHOLE bucket is evidence.

It is more complicated than this.

Firstly, the case is not built entirely around this; it is pure fantasy on the part of Dotcom's lawyers. The charges against him are very clear.

Secondly, the search warrant was not wholly predicated on these files; again, it is irrelevant.

Thirdly, the search warrant was already invalidated on being grounds of overbroad.

Fourthly, it is probably not relevant anyway; should he be tried in the US, the fact that the New Zealand police messed up their search warrant is not necessarily relevant to the US courts. While US authorites cannot use evidence from illegal searches and seizures they themselves executed or ordered executed, if a third party provides them with evidence, even if it is acquired illegally, it is fair game. In this case, the fact that the NZ police acted in good faith and the fact that the US government did not order them to perform an illegal search (the NZ police had to get their own warrant, which they messed up on, not the US) means that there's a pretty good chance that any evidence seized in said raid is admissible in a US court of law, though Kim Dotcom's lawyers will obviously argue against this on the basis that it was ultimately a US prosecution and thus they are indeed responsible for the NZ police's behavior, even though they are not actually under US control.

DarthShiv wrote:

That is EXACTLY the point. Kim did not audit every single upload. Just like the postal service, they don't check every mail sent, every parcel. BOTH deliberately! Why? Because it is not economical to do so. So why is it ok for the postal service to have it one way and then flog Kim for doing the same thing?

Look, do some research on the case before commenting on it.

The allegations are that he KNEW he had these files and continued to distribute them. The US Postal Service has sovereign immunity, but if, say, UPS had a package and knew it was a bomb and delivered it to its destination anyway, they would be culpable of a crime. That is ILLEGAL. The issue is KNOWLEDGE.

And there is direct evidence, in both this case and other areas of evidence, that they KNEW, DIRECTLY that they were distributing illegal files via their network, and had specific knowledge of a number of them, and failed to act to restrict access to said files. The moment this happens, you are guilty of copyright infringement, and the fact that they knew this, profited from it, and indeed paid pirates to upload illegal content for them to distribute makes them guilty of -criminal- copyright infringement - they knowingly and maliciously distributed files they knew they were not legally permitted to distribute. It is this specific knowledge that dooms them.

This is all in the original court documentation.

This case has a lot of people commenting who have either forgotten or never bothered to learn the basics of the case. Please educate yourselves before railing about how horrible the US government/NZ government/MPAA/RIAA/insert group of your choice here is.

36 infringing files? this all the reason the government needed to go all gung ho on megaupload?why didn't the government just talk it over with mega and slap a hefty fine instead?they weren't dealing in drugs or prostitution anyway.

They were engaging in the distribution of illegal goods. Indeed, their crimes are far worse than prostitution and drug use from a moral standpoint; those are victimless crimes, whereas copyright infringement is not.

And it was explicitly stated that there was more evidence than this.

Please read the article before commenting.

-aivars- wrote:

Good to know that I am no lawyer. Because my logic fails here: "search warrant included other, substantial evidence of criminal intent". I set aside adjective, but still - warrant contained evidence? If they already had evidence, why this search warrant was needed afterall? How can search warrant include evidence?

Man, are people really this ignorant?

The government HAS to have probable cause to get a search warrant - they need to have sufficient evidence of wrongdoing in order to get one. Search warrants are executed in order to gather additional evidence.

If they don't where you live, you live in a police state.

masterblinky wrote:

So the owners of the rental lock boxes are guilty of drug trade if someone stores illegal drugs in them? The banks are also guilty of holding illegal items if someone puts one in a safety deposit box?

Yes, if they know the material is there and don't do anything about it, they are in fact guilty of a crime.

In the case of MU it is actually much worse though, as it isn't analogous at all - in their case, they are actually guilty of THE crime of willful distribution.

masterbinky wrote:

If the search warrant ends up not being correct in a significant way, then all evidence aquired by that search warrant is inadmissable. If everything they have begins with that warrant, that drop in the bucket, determines whether the WHOLE bucket is evidence.

It is more complicated than this.

Firstly, the case is not built entirely around this; it is pure fantasy on the part of Dotcom's lawyers. The charges against him are very clear.

Secondly, the search warrant was not wholly predicated on these files; again, it is irrelevant.

Thirdly, the search warrant was already invalidated on being grounds of overbroad.

Fourthly, it is probably not relevant anyway; should he be tried in the US, the fact that the New Zealand police messed up their search warrant is not necessarily relevant to the US courts. While US authorites cannot use evidence from illegal searches and seizures they themselves executed or ordered executed, if a third party provides them with evidence, even if it is acquired illegally, it is fair game. In this case, the fact that the NZ police acted in good faith and the fact that the US government did not order them to perform an illegal search (the NZ police had to get their own warrant, which they messed up on, not the US) means that there's a pretty good chance that any evidence seized in said raid is admissible in a US court of law, though Kim Dotcom's lawyers will obviously argue against this on the basis that it was ultimately a US prosecution and thus they are indeed responsible for the NZ police's behavior, even though they are not actually under US control.

DarthShiv wrote:

That is EXACTLY the point. Kim did not audit every single upload. Just like the postal service, they don't check every mail sent, every parcel. BOTH deliberately! Why? Because it is not economical to do so. So why is it ok for the postal service to have it one way and then flog Kim for doing the same thing?

Look, do some research on the case before commenting on it.

The allegations are that he KNEW he had these files and continued to distribute them. The US Postal Service has sovereign immunity, but if, say, UPS had a package and knew it was a bomb and delivered it to its destination anyway, they would be culpable of a crime. That is ILLEGAL. The issue is KNOWLEDGE.

And there is direct evidence, in both this case and other areas of evidence, that they KNEW, DIRECTLY that they were distributing illegal files via their network, and had specific knowledge of a number of them, and failed to act to restrict access to said files. The moment this happens, you are guilty of copyright infringement, and the fact that they knew this, profited from it, and indeed paid pirates to upload illegal content for them to distribute makes them guilty of -criminal- copyright infringement - they knowingly and maliciously distributed files they knew they were not legally permitted to distribute. It is this specific knowledge that dooms them.

This is all in the original court documentation.

This case has a lot of people commenting who have either forgotten or never bothered to learn the basics of the case. Please educate yourselves before railing about how horrible the US government/NZ government/MPAA/RIAA/insert group of your choice here is.

As per the DMCA, doesn't matter IF they knew about infringing files or not, it's up to the rights holders to track it and report it, now if there's any evidence that proves they didn't remove files once a DMCA claim was made, and there isn't, then Mega could have been maybe liable, the law was written to be vague and useless as possible

So the owners of the rental lock boxes are guilty of drug trade if someone stores illegal drugs in them? The banks are also guilty of holding illegal items if someone puts one in a safety deposit box?

Hell, a police officer just has to say hold this, and if they hand you something illegal and you don't drop it (without even knowing it is an illegal item) they can charge you with a crime?

This doesn't seem to be right somehow....

every single thread this comes up. If the lock box, storage company, or bank (which has been in the news a lot recently) is aware that something illegal is happening and even encouraging it then they can be charged with a crime. The second case is entrapment.

Whether Kim is guilty or not of those crimes are decided in a court of law. That is why the gov needs to have him extradited, to determine if he is guilty.

In such cases, the degree of culpable knowledge and/or collaborative involvement and/or active instigation is a significant consideration. For example, if a bank knowingly cultivates significant business with a drug cartel, they are liable to find themselves be in (criminal) legal trouble -- even "turning a blind eye (a.k.a. "Nelsonian" blindness/) is not a defence).

That said, I don't really know how guilty Kim Dotcom is, and haven't followed the case closely enough to have a qualified opinion; but at this point it's become irrelevant -- the USA has mismanaged any legal case it might have had so badly and so improperly, that Kim Dotcom can legitimately present himself as a victim, and the proceedings as illegitimate, regardless.

As per the DMCA, doesn't matter IF they knew about infringing files or not, it's up to the rights holders to track it and report it, now if there's any evidence that proves they didn't remove files once a DMCA claim was made, and there isn't, then Mega could have been maybe liable, the law was written to be vague and useless as possible

This is a common misconception, but is in fact incorrect. It is not the responsibility of Megaupload to monitor all files that are being uploaded to it for legal compliance (though they may be required to take "reasonable steps" to counteract piracy). However, this does not mean that if it becomes aware of content being illegal that they may continue to distribute it. That is illegal under ALL law. Safe harbor provisions protect you in the case where you do not have mens rea - a guilty mind, that is to say, knowledge of the crime. If you have specific knowledge that illegal content is being distributed via your website, you are obligated to delete that content, otherwise you are no longer a safe harbor. Period. It doesn't matter how you find out, it merely matters that you knew and did nothing (and in this case, profited by your inaction).

The fact that they solicited for illegal content is just a further nail in their coffin; deliberately paying pirates to upload rips to your site is very much a violation of safe harbor rules, not to mention a felony in and of itself.

The fact that they solicited for illegal content is just a further nail in their coffin; deliberately paying pirates to upload rips to your site is very much a violation of safe harbor rules, not to mention a felony in and of itself.

Sadly, no one cares about this key fact. Everyone wants to rage their heads off at the DOJ, the US government, RIAA, MPAA (even being little children and calling them the MAFIAA), New Zealand, but no one wants to peg even the slightest ounce of blame or fault on Dotcom.

On Ars, if you even have the slightest suspicion that Kim might be guilty, you are downvoted into oblivion and called "blind" and "American".

I don't really care which side wins out on this shitstorm.

Do I think the American government fucked up this case? Yes.Do I think that this is at least partially funded by the media industry? Undoubtedly.

But do I think Kim Dotcom is an innocent little angel? Absolutely not. While you are all busy raging about how the US/RIAA/MPAA have been playing everyone for fools, you are all conveniently forgetting how you are getting played by Dotcom. He will soak up all the support he can get from activists and try to paint the US in a poor light while attempting to hide what he did. When has he ever properly refuted his actions? When has he counter-argued evidence? When has he ever taken responsibility, remorse, or even said "yeah, maybe I could have deleted this a bit sooner"?

Never. Why is that? If he is so innocent, why has everything he's done up until this point been mockey, immaturity, and further monetization?

He's made plans to restart his filehosting service (with encryption that he's claiming will prevent him from seeing the files but in reality is just his plausible deniability defense), he's repeatedly flaunted himself and mocked all parties involved, and now has set up a music streaming service that hijacks ad revenue from honest (and to be fair, dishonest) web developers and sites.

It's pathetic. You all want this to be David and Goliath, and you want to go nuts about about how this is all about dirty money, but have any of you taken a deep breath, stepped back, and even bothered to notice that Dotcom is ALSO all about the money? If you're going to spot corruption, spot it on both sides.

It's like all those people who demonized Apple for their lawsuit against Samsung, but when Samsung does the lawsuits (or HTC), it's perfectly okay and justified.

This must be why the "Land of the Free!" is now ranked 7th in the world for freedom. While New Zealand, funny enough, is 1st.

There is no empirical way to measure freedom. There is no freedometer you can stick up the country's rectum to determine its freedom levels.

Most freedom measures are based on polls or people weighting various factors, and are very prone to bias (in the case of the latter) and of not reflecting reality but merely the perception thereof (in the former). See people who claim that the US is practically a police state, or people in China who believe they are pretty much free.

The freedom in a number of top-tier free countries is pretty much indistinguishable from each other.

Well I can read, and it clearly says that those 39 files were used as part of the probable cause for the warrant. Section 17 of the document in case your wondering. Its not the only thing they were looking for, but it was one of the things. So while the government can claim those movies dont count, they sure as heck are listed in the warrant.

Which is, as I already pointed out, a different warrant, and not the one the government is quoted as referring to.

So, like I said, how does this undercut the government's case? Do the entire proceedings rest on this one paragraph of this one warrant to seize the domain names?

While I haven't seen all the warrants (are they all available to the public?) the fact that it is in one of the warrants used to seize MU assets counters the governments argument that they never used that as evidence. This casts doubt on their case. It may not invalidate anything, but it certainly doesn't help.

LiquidSolstice: I don't think anyone here thinks KDC is a little angel. However, the prosecution in this case have mangled it from the start. In addition, punishment has already been at least partially served, we shut down his multi million dollar company. Also realize that while he may be guilty here in the US, he is neither present here nor a US citizen. He is almost assuredly not guilty of anything in NZ. So while you may not like the man, he shouldn't be treated poorly because he is an a**hole. Thats not how justice is suppose to work. Everyone deserves the same treatment. Notice we didn't lock up the Exxon execs when they spilled all that oil in the Gulf. That was a far worse crime that anything KDC has done.

He's made plans to restart his filehosting service (with encryption that he's claiming will prevent him from seeing the files but in reality is just his plausible deniability defense), he's repeatedly flaunted himself and mocked all parties involved, and now has set up a music streaming service that hijacks ad revenue from honest (and to be fair, dishonest) web developers and sites.

People defend it because Kim should not be liable for the content people put on the service. That is fundamentally wrong. The individual uploaders are the ones doing wrong. It is like taking down a TOR node because someone was using the TOR network to view kiddie porn or suing an ISP for not enforcing digital media rights. I am overlooking Kim's actions because there are fundamental rights, that while he may be a bad guy and is abusing the rules, the fact is that everyone should have these rights and big content should not be able to buy laws that strip them.

He's made plans to restart his filehosting service (with encryption that he's claiming will prevent him from seeing the files but in reality is just his plausible deniability defense), he's repeatedly flaunted himself and mocked all parties involved, and now has set up a music streaming service that hijacks ad revenue from honest (and to be fair, dishonest) web developers and sites.

People defend it because Kim should not be liable for the content people put on the service. That is fundamentally wrong. The individual uploaders are the ones doing wrong. It is like taking down a TOR node because someone was using the TOR network to view kiddie porn or suing an ISP for not enforcing digital media rights. I am overlooking Kim's actions because there are fundamental rights, that while he may be a bad guy and is abusing the rules, the fact is that everyone should have these rights and big content should not be able to buy laws that strip them.

The problem is THIS IS NOT WHAT HE IS BEING ACCUSED OF DOING.

You are not taking a principled stand, you are protecting someone who committed a different offense.

The reason he is being prosecuted is because of the following:

1) He was distributing files that he knew he did not have permission to distribute, not in the abstract, but in the specific - he had direct, specific knowledge of illegal content, and left it up. As he was the one distributing it via his service, and profiting from it, he was responsible for it. It is not that he did not know - he did and did nothing. This is the violation.

2) He actually paid pirates to upload illegal content. He knew they were pirates, and knew they were uploading illegal content, and actually paid them to upload MORE illegal content. This is very much illegal - he was deliberately acting as a "fence" for illegal goods.

3) He is accused of deliberately obfuscating the locations of files so that, when he was legally required to pull down files, he instead pulled down LINKS to the files, but instead left other links active so that the content continued to be distributed illegally, despite ostensibly removing the file (and as far as the person making the request could tell, he did - after all, they couldn't link to it the same way anymore). This is obviously criminal, as he was deliberately protecting these files from being pulled down so he could continue to profit from it.

Before you comment on a case, please actually understand what, exactly, the person is being accused of. This isn't about him running a file locker; this is about him knowingly and deliberately and SPECIFICALLY profiting from the distribution of illegal content. You are not culpable if someone uploads something illegal to your website, but you are if you have specific knowledge of it and continue to spread the content anyway.

While I haven't seen all the warrants (are they all available to the public?) the fact that it is in one of the warrants used to seize MU assets counters the governments argument that they never used that as evidence. This casts doubt on their case. It may not invalidate anything, but it certainly doesn't help.

1) He was distributing files that he knew he did not have permission to distribute, not in the abstract, but in the specific - he had direct, specific knowledge of illegal content, and left it up. As he was the one distributing it via his service, and profiting from it, he was responsible for it. It is not that he did not know - he did and did nothing. This is the violation.

Ok I'm happy to concede this is a violation if true...

Titanium Dragon wrote:

2) He actually paid pirates to upload illegal content. He knew they were pirates, and knew they were uploading illegal content, and actually paid them to upload MORE illegal content. This is very much illegal - he was deliberately acting as a "fence" for illegal goods.

I've seen this claim but there is no evidence in the article... just a claim.

Titanium Dragon wrote:

3) He is accused of deliberately obfuscating the locations of files so that, when he was legally required to pull down files, he instead pulled down LINKS to the files, but instead left other links active so that the content continued to be distributed illegally, despite ostensibly removing the file (and as far as the person making the request could tell, he did - after all, they couldn't link to it the same way anymore). This is obviously criminal, as he was deliberately protecting these files from being pulled down so he could continue to profit from it.

Again I've seen this claim but there is no evidence in the article... just a claim.

Is there any actual evidence of these claims made public? Not attacking. Innocent until proven guilty and all that jazz.

@DarthShiv: The evidence for these accusations is in the original documents on the case, posted in January of last year. It consists of files seized on the Carpathia servers, various documentation of the latter accusations (which obviously are difficult to prove now that the servers are down, but the government has copies of everything they need to), and email communiques inside the company.

Particularly damning (on the second point) was an electronic discussion about their uploader rewards program, wherein they noted a list of illegal content that this person had been uploading which brought them to their attention for the program - cracks, cdkey generators, and illegal copies of files. They then authorized payment to him as part of their program to encourage him to upload more of the same.

The actual court documents have excerpts from the emails (including the above), among other things. Its pretty enlightening, and quite damning.

Not much of a denial by the DoJ. It isn't saying "We didn't instruct Carpathia to instruct MegaUpload", which is what Dotcom is actually accusing them of. The DoJ has not addressed the allegation, which leads the reader to wonder why it has omitted those details.

@DarthShiv: The evidence for these accusations is in the original documents on the case, posted in January of last year. It consists of files seized on the Carpathia servers, various documentation of the latter accusations (which obviously are difficult to prove now that the servers are down, but the government has copies of everything they need to), and email communiques inside the company.

Particularly damning (on the second point) was an electronic discussion about their uploader rewards program, wherein they noted a list of illegal content that this person had been uploading which brought them to their attention for the program - cracks, cdkey generators, and illegal copies of files. They then authorized payment to him as part of their program to encourage him to upload more of the same.

The actual court documents have excerpts from the emails (including the above), among other things. Its pretty enlightening, and quite damning.

For those too busy to check out the article, its interesting perspective is that the rewards program was not rewarding copyright infringement specifically, but only as a side effect of rewarding all popular uploads. Here's the meat of it:

Quote:

The Megaupload indictment claims that the defendants paid their permanent members money in exchange for uploading copyright-protected files, and shuttled money to those engaging in the most blatant illegal activity through their site's Premium User rewards program.

This all sounds incredibly incriminating...until the indictment itself muddles its earlier points.

Later on, the authors themselves admit that what Kim Dotcom and associates were actually doing was running a very open rewards program, similar to the kind found on other user-reliant sites, which gives financial incentives for users to become full-time members and to upload popular files.

Some of those users undoubtedly became popular by uploading and sharing copyright-protected files, and some also undoubtedly joined Megaupload in order to use the site's resources illegally.

For those too busy to check out the article, its interesting perspective is that the rewards program was not rewarding copyright infringement specifically, but only as a side effect of rewarding all popular uploads. Here's the meat of it:

Quote:

The Megaupload indictment claims that the defendants paid their permanent members money in exchange for uploading copyright-protected files, and shuttled money to those engaging in the most blatant illegal activity through their site's Premium User rewards program.

This all sounds incredibly incriminating...until the indictment itself muddles its earlier points.

Later on, the authors themselves admit that what Kim Dotcom and associates were actually doing was running a very open rewards program, similar to the kind found on other user-reliant sites, which gives financial incentives for users to become full-time members and to upload popular files.

Some of those users undoubtedly became popular by uploading and sharing copyright-protected files, and some also undoubtedly joined Megaupload in order to use the site's resources illegally.

I wonder if anyone in the history of the internet has ever stopped to wonder why filehosting sites that claim to be legitimate don't throttle your upload speed, but the moment you want your (your legally owned files of course) out of your storage, you need to pay in order to download it quickly? Why would you use them if if that was the case? And why would they pay people who had the most free uploads?

This is a common misconception, but is in fact incorrect. It is not the responsibility of Megaupload to monitor all files that are being uploaded to it for legal compliance (though they may be required to take "reasonable steps" to counteract piracy). However, this does not mean that if it becomes aware of content being illegal that they may continue to distribute it. That is illegal under ALL law. Safe harbor provisions protect you in the case where you do not have mens rea - a guilty mind, that is to say, knowledge of the crime. If you have specific knowledge that illegal content is being distributed via your website, you are obligated to delete that content, otherwise you are no longer a safe harbor. Period. It doesn't matter how you find out, it merely matters that you knew and did nothing (and in this case, profited by your inaction).

The fact that they solicited for illegal content is just a further nail in their coffin; deliberately paying pirates to upload rips to your site is very much a violation of safe harbor rules, not to mention a felony in and of itself.

I think you're wrong and I will tell you why: Viacom vs. Youtube. According to internal communication, Youtube was definitely aware of the infringing content and they even discussed how to utilize it to increase mindshare and income. It was also alleged that the paintiff planted some of the infringing files to the service. Yet Youtube was found not guilty in the court of law. How exactly is the MU case different?

I think you're wrong and I will tell you why: Viacom vs. Youtube. According to internal communication, Youtube was definitely aware of the illegal content and they even discussed how to utilize it to increase mindshare and income. It was also alleged that the paintiff planted some of the infringing files to the service. Yet Youtube was found not guilty in the court of law. How exactly is the MU case different?

They weren't found not guilty in a court of law. The case was dismissed via summary judgement in 2010, but it was actually recently reinstated precisely because of those emails - Stanton's original ruling was itself overruled on appeal. So using it as an example is questionable, as the rationale for the overruling was EXACTLY that they had specific knowledge of copyright infringement.

So uh, yeah. You might see some more fun times on that front in the future. The case isn't over until the appeals process is exhausted, and it hasn't been.

I wouldn't be surprised if we don't see a final judgement until 2016, though I suspect that they will reach a settlement at some point.

If you weren't aware of it, and haven't read it, then you don't really know anything about the case. It is crucial in understanding. Plus you know, reading about Kim Dotcom's criminal record, and how he bribed his way into residency status in New Zealand.

Overt acts (starting on page 28) is where you'll find most of the really good stuff, but I would recommend reading it in full; its an interesting read. If you get bored reading through the stuff at the start of it, h is where they start talking about their scraping from Youtube, and then it goes downhill from there.

r and u are especially damning, as it demonstrates knowledge that they were paying people for uploading illegal content (specifically so, in fact, and they actually looked at what they were paying for); t, likewise, is very bad because it shows their abuse of their own abuse system. y is also very bad, as it indicates that they were informed about the massive infringement taking place, to the point where Google was worried about doing business with them.

Its very, very bad news.

I suspect that the people who have read the original indictment are the people who, by and large, think that it is pretty bad that Kim Dotcom is getting so much support from people who don't understand what they're supporting or that they're part of a PR apparatus.

Good to know that I am no lawyer. Because my logic fails here: "search warrant included other, substantial evidence of criminal intent". I set aside adjective, but still - warrant contained evidence? If they already had evidence, why this search warrant was needed afterall? How can search warrant include evidence?

Never mind. No lawyer, no US resident. Life is much simpler where I live.

--Your honor, we hereby present positive evidence that a shipment of 5 bricks of hashish was delivered to this address. We are basing our request to search these premises on the premise that the owners of the premises may have additional illegal materials in their possession.--

Yes, sufficient evidence that what you are searching for, will be found, is supposed to be presented in asking for a search warrant. The type and quality of evidence varies from type to type, but it is not supposed to be possible to tell a judge "We would like to search the warehouse at 9th & Post to see if they have anything illegal. Please give us a warrant allowing us to present anything we turn up as evidence if we decide to prosecute." and have the judge grant the warrant with no additional basis for believing anything will be found.

In the MegaUpload case, the request includes, "MU has retained 36 of the files we told a third party to inform MU to not disturb as they were part of an ongoing investigation and we believe their failure to remove these files we asked them not to disturb indicates that they are failing to remove other illegal uploads and we need a warrant that will allow us to determine if this is true" Now they are saying that -legally- because they told the Carpathia to pass on the request, the request was not given to MU.

As noted in the post immediately above, there is much additional "evidence" in the actual case, but it is the 36 files that are being prosecuted in the Press for now.

In American law, a search is supposed to be "reasonable". The 36 files that MU was asked to not disturb are part of the evidence used to convince a court that a search of MU's servers for additional infringing content was "reasonable".

Each judge has a personal opinion of what the word "reasonable" means as well as many years of precedent for common types of searches that they are supposed to use when deciding if any particular request is "reasonable".

Edit: Here is how the court is informed of the files that MU says they were informally asked not to remove.

Quote:

25.

On or about June 24, 2010, members of the Mega Conspiracy were informed,pursuant to a criminal search warrant from the U.S. District Court for the Eastern District of Virginia, that thirty-nine infringing copies of copyrighted motion pictures were present on theirleased servers at Carpathia Hosting, a hosting company headquartered in the Eastern District of Virginia. A member of the Mega Conspiracy informed several of his co-conspirators at that timethat he located the named files using internal searches of their systems. As of November 18,2011, more than a year later, thirty-six of the thirty-nine infringing motion pictures were stillbeing stored on the servers controlled by the Mega Conspiracy.

Notice the implied "We told them to remove the files" that the lawyers can truthfully deny if necessary

Ironically, here in New Zealand, Mega could not have been raided for prostitution. This is because that has been an entirely legal occupation and business activity for almost a decade now (a Prostitution Reform Act was passed here in 2003).

Back to this case, it is not a legal certainty that DotCom and associates have allegedly committed any of the rather short list of crimes under which a person can be extradited from New Zealand to USA under the terms of the extradition treaty signed in 1970. Copyright is not a sufficiently serious crime, and our court has previously ruled that racketeering is not an extraditable offence (the reason being, I think, that we do not have racketeering or a sufficiently equivalent crime on our statutes).

If the search warrant ends up not being correct in a significant way, then all evidence aquired by that search warrant is inadmissable. If everything they have begins with that warrant, that drop in the bucket, determines whether the WHOLE bucket is evidence.

I think the U.S. legal system refers to it as the fruit of the poisonous tree doctrine. Which is pretty good actually, although it's probably a source for countless technicalities (read: immunity for the wealthy), but as due process goes, I'd rather err on the side of specificity (as opposed to sensibility).

Schmitz's attorney's motion is still probably not going to stick, though, considering the allowance for a bona fides exception. It shouldn't be too much trouble establishing good faith. I mean, hey, raiding Megaupload for movie rips; well, maybe not that clear, considering Mega was apparently DMCA compliant.

Totaly off topic, Titanium Dragon, you often prove extremely irksome, but rarely stupid. But you are terribly disingenuous :

Titanium Dragon wrote:

bongbong wrote:

36 infringing files? this all the reason the government needed to go all gung ho on megaupload?why didn't the government just talk it over with mega and slap a hefty fine instead?they weren't dealing in drugs or prostitution anyway.

They were engaging in the distribution of illegal goods. Indeed, their crimes are far worse than prostitution and drug use from a moral standpoint; those are victimless crimes, whereas copyright infringement is not.

bongbong was referring to dealing drugs, not using, although neither are victimless crimes. And prostitution is all too often a choice not made on a strictly personal basis.As both drugs and sex trafficking often provide money to organisations of little moral standing, I still find Dotcom's antics more palatable, socially and morally.

Dotcom may be a crook, but the U.S. legal system lets one (litterally) get away with murder with good counsels. You can't blame the man for trying to pull an O.J.

z0phi3l wrote:

As per the DMCA, doesn't matter IF they knew about infringing files or not, it's up to the rights holders to track it

I have been wondering about that one; DMCA does seem to ignore mens rea, but on the other hand, the prosecution has been quoting internal communications trying to prove a previous knowledge of illegal files, which doesn't make sense if you are correct.

This one looks pretty crucial. A lawyer in the room ?

Postulator wrote:

Have a look at Titanium Dragon's history before you bother responding to or quoting him.

Ad hominem. He may (or may not) be a jerk, and does seem to sometimes go ranting (as in, running-through-the-woods-naked-frothing-at-the-mouth), but he does often make sense too. In this case I think he does. Doesn't mean he's right, but he does cover territory that will be harhsly fought over.

bongbong was referring to dealing drugs, not using, although neither are victimless crimes. And prostitution is all too often a choice not made on a strictly personal basis.

Well it really depends. Obviously some pretty bad things can occur with both - people cut stuff into drugs all the time, and sex trafficking is a fairly big problem in some parts of the world. Neither inherently victimize others, however, though some would argue that selling drugs does victimize the users by enabling them to destroy themselves. While arguable, I feel that (by and large) it is their own responsibility, though I do feel some drugs should simply be illegal (at least without a prescription, and no doctor is going to write you a prescription for heroin - its just not medically necessary for anything and is horrible).

Quote:

As both drugs and sex trafficking often provide money to organisations of little moral standing, I still find Dotcom's antics more palatable, socially and morally.

Megaupload itself was an organization of little moral standing in my eyes, run by a guy with a considerable criminal record and a general disregard for the law.

Eh. I'm not a newspaper, I'm a private citizen, I can say what I want, and I would say that it is pretty clear from the evidence I have seen presented, as well as my own personal views of Megaupload (I saw far more links to infringing material there than I saw non-infringing material when it was still alive).

Quote:

Dotcom may be a crook, but the U.S. legal system lets one (litterally) get away with murder with good counsels. You can't blame the man for trying to pull an O.J.

Yes, actually, I can. It is a flaw in the legal system. It simply should not be possible. I will also note that another thing that got OJ off was a jury who was inclined to buy into the notion that "the man" was prosecuting Simpson and going after him, regardless of what evidence was presented, much of which they did not understand. There are a lot of nasty similarities here.

Good to know that I am no lawyer. Because my logic fails here: "search warrant included other, substantial evidence of criminal intent". I set aside adjective, but still - warrant contained evidence? If they already had evidence, why this search warrant was needed afterall? How can search warrant include evidence?

Never mind. No lawyer, no US resident. Life is much simpler where I live.

They need sufficient evidence to get the warrant in the first place, then that's used to gather stronger evidence for the case

He's made plans to restart his filehosting service (with encryption that he's claiming will prevent him from seeing the files but in reality is just his plausible deniability defense), he's repeatedly flaunted himself and mocked all parties involved, and now has set up a music streaming service that hijacks ad revenue from honest (and to be fair, dishonest) web developers and sites.

People defend it because Kim should not be liable for the content people put on the service. That is fundamentally wrong. The individual uploaders are the ones doing wrong. It is like taking down a TOR node because someone was using the TOR network to view kiddie porn or suing an ISP for not enforcing digital media rights. I am overlooking Kim's actions because there are fundamental rights, that while he may be a bad guy and is abusing the rules, the fact is that everyone should have these rights and big content should not be able to buy laws that strip them.

The problem is THIS IS NOT WHAT HE IS BEING ACCUSED OF DOING.

You are not taking a principled stand, you are protecting someone who committed a different offense.

The reason he is being prosecuted is because of the following:

1) He was distributing files that he knew he did not have permission to distribute, not in the abstract, but in the specific - he had direct, specific knowledge of illegal content, and left it up. As he was the one distributing it via his service, and profiting from it, he was responsible for it. It is not that he did not know - he did and did nothing. This is the violation.

2) He actually paid pirates to upload illegal content. He knew they were pirates, and knew they were uploading illegal content, and actually paid them to upload MORE illegal content. This is very much illegal - he was deliberately acting as a "fence" for illegal goods.

3) He is accused of deliberately obfuscating the locations of files so that, when he was legally required to pull down files, he instead pulled down LINKS to the files, but instead left other links active so that the content continued to be distributed illegally, despite ostensibly removing the file (and as far as the person making the request could tell, he did - after all, they couldn't link to it the same way anymore). This is obviously criminal, as he was deliberately protecting these files from being pulled down so he could continue to profit from it.

Before you comment on a case, please actually understand what, exactly, the person is being accused of. This isn't about him running a file locker; this is about him knowingly and deliberately and SPECIFICALLY profiting from the distribution of illegal content. You are not culpable if someone uploads something illegal to your website, but you are if you have specific knowledge of it and continue to spread the content anyway.

1) You'll have to provide evidence that he himself was uploading files for distribution if you want this to stick. Otherwise he was running a file hosting service, what it was used for is the choice of the customers

2) MegaUpload had a deal where you could upload files to their servers for general use and get paid for it, but I'm pretty sure their terms and conditions mentioned that you weren't allowed to upload files you didn't own the rights to

3) He didn't obfuscate the links. If a user uploaded a file to the system and it detected that the file already existed then it would point the link the user was given for their file to the existing one rather than duplicating it, this was to reduce storage requirements because hosting *without* doing that would make their already large storage requirements impossible.

The reason they deleted the links rather than the files was because there are cases where users can legally upload these files, because the link is only made public if they (the user) release it. Deleting the file would have removed access even for legitimate users, so they deleted the upload links which were found to be infringing. This isn't criminal, and in fact doing the opposite could well be a contract violation with regards to those who are legally hosting the files without distributing them. He also had an entire back end system set up which various labels had access to to easily remove links to their content which were made public (which they were also found to be abusing, removing files which would be classed under fair use or which were critical of them)

This case is exactly about him running a file locker site. Other sites have had cases brought against them with similar claims to try and force closure (Rapidshare was one of the biggest targets for this) and were found innocent of it. They just weren't targeted to the same degree that Dotcom is being.